The hon. Member for Sutton read out a number
of press cuttings, one of which referred to a senior officer in
Warwickshire. Extremists do get involved in many events and can often
inflict great damage to the cause, but causes such as this do not depend
solely on what happens during a protest. The strength of the arguments is
what matters, and many decent and honourable people involved in the protest
--whether they are Conservatives, Labour supporters or Liberal

Democrats--properly want to peacefully protest their interest in raising
the issue, and that should be welcomed. They have a strong argument, and
are exercising their right to protest.

This trade is, in my view, immoral. While it is not breaching the law, it
breaches the spirit of the law by seeking to make a profit out of something
which we accept is cruel and unjust. I very much hope that the efforts of
the Government to try to ensure that we have an EC ban on veal crates, and
also a licensing system not only in this country and neighbouring countries
but throughout Europe will be sustained. That will effectively ensure that
animals will be transported and kept in the best conditions. That is what
we are looking for, and that is what we can get.

12.59 pm

Mr. Bernard Jenkin (Colchester, North): I have little time, but I
wish to speak in the debate because a great many of my constituents object
vehemently to this trade. As the hon. Member for Newham, North-West (Mr.
Banks) said, many people who object to the trade are Tory voters. What
outrages them most is learning from the television and the radio that we
have given up the power to do anything about it. I do not accept that. I
regard this as a sovereign House, and I am not prepared to be lectured by
MAFF officials about what the House can and cannot legislate for.

I am fortunate enough, I hope, to have secured an opportunity to present a
Bill under the 10-minute rule which will restore to the Minister the powers
that he needs to apply a ban, if he considers that appropriate, and I urge
Opposition Members to support it--

Mr. Deputy Speaker (Mr. Michael Morris): Order.

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Spectac Ltd.

1 pm

Mr. John Hutton (Barrow and Furness): I am grateful for the
opportunity today to draw attention to what I believe to be a serious risk
to many of our citizens--the unscrupulous way in which many foreign-based
overseas recruitment companies operate in the United Kingdom.

I want to illustrate a particular instance of this abuse. In the weeks
leading up to Christmas 1994, 27 people became the innocent victims of a
carefully orchestrated criminal conspiracy. They each lost £8,000,
money that none of them could afford to lose. The 27 came from all parts of
the United Kingdom, but mostly from our shipbuilding towns and cities.
Eleven of them are from my constituency, where, as the Minister will know,
unemployment has rocketed over the past few years as Vickers Shipbuilding
and Engineering Ltd. yard has declined.

All 11 constituents were recruited by a Dutch company, Spectac, based in
Dordrecht and operated as a one-man business by Colin Martin. The workers,
who were welders, platers, riggers and electricians--many of them used to
work in shipbuilding--were told that they would be working on five-year
fixed-term contracts in Guam, and would be paid £4,000 a month tax-
free.

Before signing any of the contracts, many of my constituents took advice
from their financial advisers, who told them that this was a safe bet and
to proceed with the contracts. Many of them borrowed money, some
remortgaged their properties.

Spectac recruited these workers from a variety of sources. The company
placed advertisements in several British regional newspapers, and it
certainly used the jobshop operated by a local enterprise council in
Invergordon. I am grateful to the Minister for providing me with that
information. Others recruited have testified that they were notified by
local jobcentres, but in the main, details of the recruitment were
circulated through a network of word-of-mouth contacts of the type common
in the offshore construction industry. The company in Guam, Offshore
Corporation, would require each worker to deposit a confidence or integrity
bond worth nearly £8,000, which would be repaid monthly over the
duration of the five-year contract. The downpayment of £5,000 was
supposed to be a sign of good faith on the part of the workers towards
Offshore Corporation. Inevitably, the confidence bond money was duly handed
over to Spectac. The workers and their money were flown out to Thailand and
later to the Philippines. The tickets, I believe, were paid for out of the
proceeds of the integrity bonds.

After a few days in Thailand and the Philippines, the truth became
apparent. There was no company called Offshore Corporation. There were no
jobs in Guam, and the money--by this time totalling more than £200,000
--had disappeared, along with the villains of this whole dismal episode:
Ronnie Hydes, Gerry O'Connor and Colin Martin himself.

There is some doubt about whether Colin Martin was a participant in the
conspiracy. I have no opinion on that matter one way or the other, but I am
alarmed by some evidence that I received today purporting to come from
Spectac in Holland and claiming to provide evidence of a

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payment guarantee that it had lodged with
Barclays bank in Jersey to cover any problems with the non-repayment of the
integrity bond. That document, I am confident, is completely fraudulent--
and it raises doubts about Colin Martin's participation in the whole
business. Unfortunately, the whereabouts of Ronny Hydes and Gerry O'Connor
are not known; and the chances of recovering the stolen moneys are small.
On 14 February, Spectac ceased to exist as a legal entity under Dutch law.
Colin Martin is thought to be somewhere in Thailand, outside the effective
reach of any legal action in the United Kingdom, and probably anywhere
else.

My constituents have been devastated by these events. In short, they have
been exploited and ripped off.

Ms Angela Eagle (Wallasey): I congratulate my hon. Friend on
securing a debate on this important subject. Bob Neil, a constituent of
mine--the shipbuilding connection is again obvious--was also one of the 27
people affected. I can confirm that exactly the same happened to him as
happened to my hon. Friend's 11 constituents. He too stands to lose
£8,000 under the contract exposed by the good work that my hon. Friend
is doing.

Mr. Hutton: I am aware of the difficulties that my hon. Friend's
constituent, Mr. Bob Neil, is experiencing. They are exactly the same as
those experienced by the other 27 innocent victims of the crime. This is
not the first time that Ronny Hydes and Gerry O'Connor have perpetrated
this kind of fraud. They were well known conmen and cowboys. The sad fact
is that they are still able to perpetrate this fraud in the United Kingdom.

I want to discuss how the Government can respond to what I believe is an
acute problem. We are dealing not just with work outside the European
Union. There is also well documented evidence of abuse on construction
sites in Germany, where many skilled British workers have found themselves
ripped off--their wages have not been paid, and so on. Mr. Bob Neil's case
is a stark reminder of just how vulnerable many of our fellow citizens are.
They never expected to be out of work, but they possess valuable skills,
and they find themselves facing the dismal prospect of years out of work in
this country. Naturally, they tend to look overseas for employment
opportunities. I do not believe it fair to say that the 27 people involved
were gullible: they were innocent victims of a crime. These events
highlight deficiencies and loopholes in what is left of our regulatory
framework after deregulation. They also highlight a number of gaps and
loopholes in the law. Unless we deal with those problems, it is likely that
they will be repeated again and again in the years ahead.

We know that cowboys operate in the overseas recruitment business, often
through front companies that act as agents for undisclosed principals. We
need seriously to tackle and confront such problems. Probably no regulatory
system can be foolproof, but we can do a number of things to make it harder
for the cowboys to operate. First, the Government should look at the
arrangements for checking the bona fides of foreign-based recruitment
companies that operate in the United Kingdom. A recruitment company that
has no operational base in the United Kingdom falls outside the scope of
the Employment Agencies Act 1973, so it is not

Column 313

possible under UK domestic legislation for
enforcement action to be taken against a foreign-based recruitment agency.

Effective action will require co-operation between European Union member
states if we are to deal with the problem satisfactorily. I hope that there
will be a chance, under the French presidency, of another look at the
posted workers directive to see whether there is any prospect of breathing
life into that initiative. I recognise that, if it has life left in it, it
might benefit only workers who work in the EU. Of course, the case that I
am highlighting goes outside the EU, and would not be covered by the posted
workers directive. Secondly, the Department of Employment should ensure
that all Government agencies are properly advised about consulting the
overseas placing unit when handling overseas job places. That is especially
necessary when job places are being advertised by a recruitment company. I
understand that that did not happen in the case of the Invergordon job
shop, which is run by the local enterprise company and is part of the
Highlands and Islands enterprise agency.

If an overseas recruitment company were able to operate in this country
through agencies established by central Government without any effective
procedures for ensuring that proper information was disclosed between the
agencies, there would be a serious abrogation of responsibility. I am
prepared to accept that this case may be an example of a one-off, a
mistake, but there were guidelines. It seems that they were not followed in
this instance. I hope that it is a one-off. If it is not, the Minister
should seriously consider what has happened. It is one of the ways in which
we should have regard to how recruitment agencies are operating.

We must, of course, operate within a framework of European law in
partnership with European Union member states, but there is a case for the
Government examining the operation of the Employment Agencies Act 1973 and
tightening some of their administrative arrangements for disseminating
information and best practice in advising local job shops, job clubs and
jobcentres about overseas recruitment and vacancies.

Thirdly, measures need to be taken to deal with integrity bonds. It is this
aspect of the Spectac case that concerns me most. The Government should
consider making it unlawful for companies to require the payment of such
bonds in the United Kingdom. At the least, there should be more effective
control over how the moneys are to be handled.

If it is considered inappropriate to make the payment of integrity bonds
unlawful, there is a case for saying, for example, that any payments should
be held on account by trustees and not, as in the Spectac case, paid
directly by the 27 workers recruited by Spectac to the recruitment agency.
When that happens, there is little or no effective control over the moneys,
including where they eventually end up. In the Spectac case, we still do
not know where the moneys ended up.

The Government should consider amending the guidelines issued by the
overseas placing unit to overseas jobseekers. In particular, the guidance
should be amended to warn against paying into integrity or confidence
bonds. There is nothing in the guidelines issued by the overseas placing
unit that refers directly or indirectly to the

Column 314

problems associated with integrity bonds.
There is a warning about working overseas and not being covered by United
Kingdom employment protection legislation, but that misses the point. Most
people working in the far east, for example, would assume that that
legislation does not extend to Guam and Thailand.

The problem lies more with some of the sharp practices that are
increasingly finding their way into the recruitment agency business.
Integrity bonds are inherently dangerous and dodgy. The Government should
carefully consider the guidance they have already issued to overseas job
seekers, with a view to spelling out the problems associated with the
payment of integrity bonds.

It may be appropriate, in the light or wake of the Spectac case, for the
Department of Employment to consider advising the editors of British
regional and national newspapers against handling any advertisement from
foreign or domestic recruitment agencies that require payment of integrity
bonds. That would involve the Government in recommending editors and
newspapers generally to engage in an easy and standard form of inquiry.

Our newspapers provide the main forum for the cowboys' operations. The
Government should require an investigation to determine whether any vacancy
being handled or placed through any agency requires the payment of an
integrity bond. If the Government are not convinced of the need to make
such payments unlawful, they should introduce a requirement that
advertisements should warn the public of the dangers or hazards associated
with paying integrity or confidence bonds. We must bring the perpetrators
of these crimes to justice. I know that the Minister is extremely
competent, but I do not believe that her jurisdiction extends into the
Foreign and Commonwealth Office. I hope, however, that the Government will
be in contact with the Dutch and Thai authorities to ensure that Hydes,
O'Connor and Martin are all held to account for their actions.

It is clear that no criminal offence took place within the jurisdiction of
the United Kingdom courts, but there may have been violations of the Dutch
criminal code. I hope that the Government will raise the extradition of
Hydes, O'Connor and Martin with the Dutch Government. British citizens have
been the victims of an appalling fraud. That being so, I hope that the
Government will do all they can to ensure that justice is seen to be done
in this case.

1.14 pm

The Minister of State, Department of Employment (Miss Ann
Widdecombe): I congratulate the hon. Member for Barrow and Furness (Mr.
Hutton) on obtaining the debate and on raising an important matter. He will
have increased public awareness of the problem, and I congratulate him on
that, too. I congratulate him also on having his debate at such a
"seasonal" hour. I hope that afterwards I do not go on autopilot and go
home forgetting that there is the rest of the parliamentary day.

First, I shall respond to some of the hon. Gentleman's specific points
about what the Government might seek to do to counter what is, fortunately,
a rare but serious type of fraud.

We shall strengthen the guidance that we give to warn job seekers about the
dangers of integrity bonds. I take the opportunity to reinforce the advice
that we already give job seekers, which is that, if they find in a magazine

Column 315

or newspaper an advertisement of employment
abroad, they should take it up and have it checked through their jobcentre
with our overseas placing unit, about which I wish to say more in a moment.
That is a sensible measure, which will greatly increase the protection
offered to job seekers.

European legislation will not help in dealing with the tiny minority of
fraudsters who come within the terms of the debate. The Department has,
however, taken up with the Dutch Minister with employment responsibilities
the matter of illegal agencies that are based in the Netherlands. Officials
will be taking discussions forward.

We have already taken steps to warn job seekers about bogus agencies,
through a poster and leaflet campaign. In the light of the debate and in
the light of the Spectac incident, I shall examine the need to refresh the
campaign.

I do not entirely share the hon. Gentleman's view that we should be making
representations to newspapers. Newspapers are already well aware that it is
not in their interests to carry advertisements that place their readers at
risk. On the other hand, I am sure that the hon. Gentleman will acknowledge
that bogus agencies do not make their purposes entirely clear in newspaper
advertisements. I think that he will accept that it is quite difficult for
newspapers to come to judgments. Often, however, they contact the
Department for advice when they think that there is an element of doubt.
There is already some contact between newspapers and the Department.

Ms Eagle: Is there a list of companies that are known to have been
fraudulent in the past that the Department of Employment could refer to or
begin to keep, if it does not do so already? At least those companies would
have to keep changing their names and taking on new forms if they were
intent on trying to perpetrate the same fraud over and over again.

Miss Widdecombe: When I come to discuss the overseas placing unit, I
shall explain that one of the purposes is to check on the bona fides of job
vacancies that are advertised from abroad. Given its experience, the unit
would obviously have knowledge of companies where there was established
fault or doubt. That is not information that would be held centrally in
every jobcentre. We have the unit as a point of referral, so that we can
try to keep a level of expertise.

I turn to the specific case that the hon. Member for Barrow and Furness has
raised.

I wrote to him on 12 February and set out the steps that the Employment
Service had taken to establish how the vacancies had been drawn to the
attention of job seekers. I confirmed that it was not, in fact, through the
Employment Service, and I also told him the checks that the Employment
Service makes on vacancies that come to it from employers in other
countries.

Of course we deplore completely the activities of bogus employers who trade
in entirely fictitious jobs overseas with the sole intention of defrauding
job seekers. It is a practice that is known to us, but it is, as I said
earlier, thankfully, still rare. Where and when we can, we are taking steps
to ensure that it happens even less often. I would advise anybody
considering paying an integrity bond to take legal advice before doing so.
They may well end up having to pay a solicitor, only to find that they are
advised not to take the job, but that is infinitely better than losing
thousands of pounds on an integrity bond.

Column 316

This very unfortunate incident must be seen
in context so that we can tackle it appropriately. About 5.7 million people
change jobs each year. Many do so through informal channels, such as
friends, colleagues or newspaper advertisements. The Employment Service and
the private sector recruitment agencies have a valuable part to play, both
in helping people to find work and in stimulating a flexible labour market.

The Employment Service is charged by the Government, of course, with
offering unemployed people--especially the long-term unemployed and others
at a disadvantage in the labour market--help and advice in finding work. In
the last full year, 1.64 million people were placed into work and 2.27
million vacancies were handled, so that puts this problem into context.

From those volumes of business, therefore, we must bear in mind the
infrequency of the type of incident that we are debating. Although we need
remedies--and we do--we must keep them in proportion to the problem;
otherwise, we would run the risk of prejudicing a wide range of good
practices for all parties in the labour market, and thus reduce our ability
to service legitimate vacancies from employers, including employers
overseas, which can bring real benefit to skilled individuals from Britain.
In that context, the posted workers directive, even if fully implemented,
would have had nil impact on this case.

The Employment Service will therefore continue to deal with vacancies
overseas, as do UK-based private employment agencies. Sadly, we cannot take
direct action on foreign-based employment agencies, but I will come back to
what the employment agencies, the Employment Service and its overseas
placing unit can do, and in most cases what they are already carrying out,
to minimise the risks of sharp practice.

The case that the hon. Gentleman has rightly drawn to the attention of the
House is highly serious. The company that he has described--Spectac--is
reported to have responded to an advertisement placed in a Dutch newspaper
calling for the submission of tenders for the supply of labour to work on a
barge on the north Pacific ocean island of Guam. The company that placed
the advertisement, variously described as the "Offshore Corporation of
Chicago" or the "Offshore Corporation of Bangkok", is bogus. Spectac, a
Dutch-based company, run by a director of British origin but resident in
the Netherlands, had agreed to obtain an integrity bond of US$12,000 from
applicants as a condition of securing the contract for the supply of
labour. Men were then recruited from various parts of Great Britain towards
the end of 1994. Some were indeed unemployed; others gave up full-time jobs
to take up the vacancies. As the hon. Gentleman rightly said, many of them
ill-advisedly raised the money for the bond through taking out loans.

The men went to the far east in early December, only to become stranded in
Manila, where it became clear to them that the jobs did not exist. The
director of Spectac returned from Manila to Bangkok, with one of the men
from the final group to leave Britain, and there they reported to the
police the activities of the Offshore Corporation. One of the directors was
then held by the Thai police for a few days, but, allegedly, was released
by them after promising to find his partner. He and his partner have since
disappeared. Spectac has now been investigated by the Dutch authorities and
closed down.

Column 317

It is known that the unfortunate victims of
the fraud came from different parts of Britain. There is, however, evidence
that areas of the country where men have recently been made redundant were
specifically targeted by Spectac. That may well explain why men in the hon.
Gentleman's constituency were particularly affected. Many of his
constituents are skilled shipbuilding workers, who supposedly would have
been able to find the money for the integrity bond from redundancy
payments.

There is also evidence that the highlands region of Scotland was targeted
by Spectac, probably because it, too, has a large number of ex-employees
from the oil fabrication industry, who have skills and a source of capital.
But after exhaustive inquiries throughout the Employment Service,
concentrating particularly on the highlands region, there is no evidence
that jobcentres were involved in what is a profoundly regrettable incident.
I believe that the hon. Gentleman might have been led to suspect that my
Department was involved, because many people learned of the bogus vacancies
through the Invergordon job shop.

The Invergordon job shop is run by three local enterprise companies
reporting to Highlands and Islands Enterprise. Two years ago, Highlands and
Islands Enterprise recognised that the oil fabrication industry, on which
the economy of the area around the Moray firth had depended heavily for two
decades, was facing significant decline. Along with the increased efforts
to ensure the survival of the existing businesses, and the provision of
advisory services, Highlands and Islands Enterprise, in conjunction with
the three local enterprise companies, set up a redundancy counselling and
placement service, known as the job shop. The job shop has, to date, been
successful in placing some 1,100 redundant oil fabrication workers. I
understand that, on 3 November, the Invergordon job shop was contacted by
the director of Spectac Ltd. in the Netherlands, notifying the management
there of an impending contract in Thailand between his company and the so-
called Offshore Corporation of Chicago, with the potential of up to 500
jobs. Seven days later, Spectac again contacted the job shop to say that
its director was in Thailand, preparing to sign the contract, and gave
details of the staff required.

In total, 54 people on the job shop's books were contacted to find out
whether they would be interested in the contract. But it was stressed to
them at that stage that nothing was known about the job or the company, and
that the approach at that point was entirely tentative, to ascertain--

Column 318

Mr. Hutton: Did the Invergordon job shop, at any time prior to
contacting those 54 individuals, discuss Spectac and the contract with the
overseas placing unit?

Miss Widdecombe: I shall come to that point, and will also point out
that, when doubts were raised in the job shop's mind, it went to great
lengths to contact all those who were on its books and who had originally
expressed interest, to point out to them that they absolutely should not
enter into a contract with Spectac, because the company's bond was illegal.
Job shop staff contacted all 54 individuals. They even contacted 20 or so
other people from the Easter Ross area, who had come to them unsolicited.
It then gave them the same advice.

In the short time left, I want to say something about the overseas placing
unit, and so shall leave my rather fuller description of what went on. I
hope that I have shown from that rather brief description that the job shop
in Invergordon took every last possible step to inform people that there
was a severe risk in paying over an integrity bond. Indeed, it did more
than that, and advised them not to do it.

The overseas placing unit, which is based at the Employment Service head
office in Sheffield, provides guidance to our jobcentres on giving advice
to job seekers about work abroad. It supplies guidance to job seekers
directly and to employers both in the UK and abroad on placing vacancies.

It is supported in Employment Service English regions, Scotland and Wales
by a network of experts known as Euro-advisers. They are connected by
information technology to a central clearing point in Brussels and to other
Euroadvisers in the European Union, so that they can exchange details of
vacancies and information on living and working conditions. On average, the
unit receives 3,000 inquiries a month on all questions about working
overseas, not only in Europe but many other parts of the world.

In 1994, 950 people were placed by the Employment Service in jobs overseas,
but as we can see from the subject of the debate, there can be special
difficulties with such vacancies. Because they are overseas, it makes it
difficult for my officials in jobcentres. For that reason--I cannot stress
this too strongly--jobcentres may not act on overseas vacancies until the
vacancies have been vetted by the overseas placing unit.

The overseas placing unit runs several checks on the contract of employment
and job description. It seeks a letter from a lawyer, written in English,
stating that the company is bona fide and clarification on the availability
of work permits. If the prospective employer cannot meet any of those
stipulations, the vacancy is refused, and may not be handled by our
jobcentres.

Mr. Deputy Speaker (Mr. Michael Morris): Order.

Column 319

Senior Officers (Employment Conditions)

1.30 pm

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury): Thank you,
Mr. Deputy Speaker, for granting me the debate. I also thank my hon. Friend
the Minister of State for the Armed Forces for being here this afternoon to
respond to it.

Some colleagues and others listening to the debate will have believed that
I applied for the debate to highlight the circumstances surrounding the
case of my constituent, Air Chief Marshall Sir Andrew--otherwise known as
Sandy--Wilson, KCB. Sir Sandy had an excellent record of service in the
Royal Air Force for more than 30 years. He began as a formidable fighter
pilot and subsequently assumed the initial command of our forces during
Operation Granby and was promoted to the post of Commander-in-Chief of RAF
Germany from 1991 to 1993. He is now Commander-in-Chief of RAF personnel at
RAF Innsworth, a four-star appointment, and he is the third most senior
officer in the RAF.

Given that exemplary record of public service, many were surprised to read
of Sir Sandy's early retirement. I should make it clear for the record that
it was his decision to seek early retirement and, on balance, bearing in
mind all the circumstances, I believe that he made the correct decision. I
hope that it will now be possible for him to retire with all the dignity
and honour that he deserves and that his retirement, terminal grant and
redundancy terms will be generous and befitting of an officer of his
stature, and as recommended in paragraphs 63, 64 and 65 of the latest
report of the Senior Salaries Review Body.

Before I move on to the substantive part of my speech, I want to highlight
the case of Private Clegg. It is vital that the Ministry of Defence
considers the yellow card instructions so that our soldiers carrying out
their duty can know that they have the full protection of the law.

Mr. Deputy Speaker (Mr. Michael Morris): Order. I am not aware that
a private is a senior officer in the armed forces.

Mr. Clifton-Brown: Thank you, Mr. Deputy Speaker. May I just say
that there is a welter of public indignation at the way--

Mr. Deputy Speaker: Order. The hon. Gentleman may chose to say all
sorts of things in different debates, but this morning he must confine
himself to senior officers only.

Mr. Clifton-Brown: Thank you, Mr. Deputy Speaker.

We should have no doubts at the outset of the origins of overstretch. The
armed services will number 236,000 in April 1995--a reduction of 22 per
cent. since April 1990--but in general terms there is every hope that the
pressure placed upon service men post-"Options for Change" will ease. I
fervently hope that the Northern Ireland peace process holds so that it
will be possible to reduce the number of roulement units in Northern
Ireland, perhaps reversing the increase from four to six which took place
in 1992.

There are other reasons for confidence that the conditions of stretch in
our armed forces will be reduced, such as the creation of a Territorial
Army unit for the Falklands, which will reduce the pressure for roulement

Column 320

units to cover those islands. However, it is
likely that commitments elsewhere, such as in Bosnia, will always remain. I
welcome the fact that the Government have accepted in full the
recommendations of the independent Review Body on Armed Forces Pay. The
average pay rise will be 2.6 per cent., taking a corporal to a possible
maximum of £18,527.

Furthermore, it is right that we continue to reward the most senior
officers for the significant and increasing managerial

responsibilities that they are now asked to undertake. We must pay
realistic rates if we are to retain those with the skills and the ability
to carry out senior officers' responsibilities. At £57,766 for a
brigadier and £97,430 for a general, I have no doubt that, in
comparison with the private sector, the taxpayer is receiving value for
money.

The report of the Senior Salaries Review Body, published this month, offers
some interesting comparisons between top officials. It recommends that a
permanent secretary should be paid between £90,000 and £150,000,
with an average of £120,000, a top judge should be paid £121,000
and the Chief of the Defence Staff should be paid £121,130. Those
figures are all comparable.

I shall say a few words about the review of pay and conditions of service
men being undertaken by Michael Bett, which is due to report to Ministers
shortly and will cover the period up to 2010. The signs are that the Bett
review is moving in the right direction and the Ministry of Defence has
said that its findings will be published and subject to consultation. I
welcome that.

However, we should recognise that there are differences between civilian
and service life. Disruption through frequent postings is the recognised
norm in all three services. Stability for those with young families should
be considered and, where practical, longer postings should be the norm.
There is also scope for better targeting of travel and other allowances for
those who need them most. The children of Army and RAF officers facing
frequent overseas postings in mid-career deserve a stable education.
Boarding school allowances have an important role to play in that. We must
also recognise the pressures that come from overseas postings and transient
lifestyles on service men's wives who are unable to establish permanent
homes, second incomes, or stable networks of friends.

Fair redundancy terms for senior officers also need to be considered in the
context of the Bett review. According to recent media stories, eight major-
generals, 32 brigadiers and 48 colonels will be asked to retire early under
the "Front Line First" study. The details of the settlement by which a
major-general will receive a total first-year pay-off of £210,000 seem
fair in the circumstances. That figure is made up of 18 months salary worth
£90,000, a further severance payment of £90,000 and a first
year's pension of £30,000. Paragraph 64 of the report of the latest
Senior Salaries Review Body states:

"We recommend that three-star officers and above who are retired early as a
result of current and future restructuring should receive compensation on
terms no worse proportionately than apply to junior officers in their
service."

Given the age and current earnings of senior officers, such sentiments are
only fair.

Column 321

It is vital that we continue to attract the
high-calibre officers on whom the future of our services rest. Ministry of
Defence figures from the statistical bulletin in June show that while
recruitment was above target for the Navy and on par for the Air Force, in
the Army there was a 20 per cent. shortfall between target and actual
officer recruitment--784 compared with 967. In comparison, the shortfall
for 1990 was only 4 per cent., based on a much higher level of recruitment.
A single year does not make a trend, but those figures should be noted with
concern.

The public perception of the status of senior officers, including their
remuneration, promotion and retirement conditions, will affect the
recruitment prospects of officers at junior level. We should in no way
compromise the level of talent in officers and other ranks whom we are
prepared to recruit.

Again, the 17th report of the Review Body on Senior Salaries states:

"The quality of the senior officer structure depends on the ability of the
services to recruit and then retain sufficient young men and women of the
highest calibre to rise to two-star rank and above."

The most important part comes next. It states:

"In our last report we expressed concern that the reduction in career
prospects could impair the recruitment and retention of junior officers. We
remain highly concerned that the highly publicised reductions in armed
forces strength may deter many high-quality individuals from pursuing a
military career."

In this short debate, it has not been possible to cover all aspects of
employment conditions of senior service men but I hope that I have
highlighted a few concerns so that people of the highest calibre will
continue to be recruited and to make their complete career in our armed
forces. The public have a right to be proud that our armed forces are the
most professional in the world. The Gulf, the Falklands and the Northern
Ireland campaign truly demonstrated that, and I hope that it will always be
so.

1.39 pm

The Minister of State for the Armed Forces (Mr. Nicholas Soames): I
congratulate my hon. Friend the Member for Cirencester and Tewkesbury (Mr.
Clifton-Brown) on securing this debate on such an important and timely
topic. Some of the points that he raised went a little wider than the
subject of the debate, but I would like to reassure him that a number of
those points will be raised, and I shall deal with them at some length,
during the Army debate tomorrow which, knowing his interest and support for
the armed forces, I very much hope he will try to attend.

I entirely agree with my hon. Friend about the great

responsibilities placed on our service men and women at all levels, and the
crucial importance of our continuing ability to recruit and retain people
of the first quality. That is one of the most important challenges that
face the armed services for the future. It is precisely with that objective
in mind that my right hon. and learned Friend The Secretary of State
commissioned the independent review of service career and manpower
structures and terms and conditions of service that is being conducted for
the Ministry of Defence by Mr. Michael Bett and his team. I hope that my
hon. Friend will be reassured to hear that Mr. Bett and his team have gone
to enormous lengths to produce what I am sure will be a worthwhile and
interesting report.

Column 322

My right hon. and learned Friend the
Secretary of State expects to receive Mr. Bett's report at the end of
March. The review is very wide-ranging, as my hon. Friend knows. It covers
pay and allowances structures, pensions, rank and career structures,
housing and accommodation policy and terms and conditions of service, all
of which, as my hon. Friend rightly knows, are extremely important to
service men and women.

The review's purpose is to ensure that, as we approach the early years of
the 21st century, arrangements are in place that are sufficiently robust
and flexible and meet our needs in terms of our ability to attract and
retain people of the highest quality to perform the very demanding tasks
that we ask of people at all levels. In particular, the review was needed
against the background of change in the deployment of the armed forces and
the very profound changes--not all of them for the better--in our national
life. Mr. Bett and his team will thus be taking the most careful account,
among other things, of changes in the nature of the tasks which our service
men and women are expected to perform, in the skills that they need and in
the work force from which they are recruited.

At the same time, the review will certainly take the fullest account of the
particular requirements and ethos of service life. That is an extremely
important matter for the armed forces and one for which we shall have a
very high regard and care. I agree with my hon. Friend about the importance
of that point and I want to assure him that it is especially reflected in
Mr. Bett's terms of reference. It is a matter that we shall consider very
carefully indeed. As for recent and current recruitment trends, lower
targets resulting from the "Options for Change" rundown have meant that we
have had few problems in attracting sufficient numbers of suitably
qualified and well-motivated young people to a career in the services, even
though applications for both officers and other ranks are down on previous
years. My hon. Friend will be pleased to hear, however, that premature
voluntary release remains at very low levels, although there is some
evidence of increased competition from the civilian job market as the
economy improves.

As recruiting targets rise in the coming years, it may be more difficult to
attract young people in the eligible age groups. That, as my hon. Friend
will understand, would be a very serious matter for the forces. We are
therefore spending great time and effort to see how we can better manage
those issues. As my hon. Friend knows, studies about recruiting have been
under way for some time and some have gone very well indeed.

My hon. Friend referred to allowances, on which we are expecting Mr. Bett
to make recommendations. My hon. Friend has identified issues such as the
degree of stability or otherwise in service life, which will obviously be a
very important background to the review team's thinking because they
influence the costs incurred by service men and women and their families as
a result of the requirements of service life.

My hon. Friend might like to know that, last week, I met an outstanding
brigadier who has served for 30 years in the Army, during which time he has
had 28 jobs in 14 countries involving 17 home moves. He remains
triumphantly happily married with two very beautiful daughters, but it is
an appropriate moment to pay the warmest possible tribute to the wives of
our service men who put up with a great deal and do not derive great
confidence from the fatuous sniping by the Opposition.